INDIAN conglomerate the Tata Group will inject up to US$50 million (RM204 million) in AirAsia India Ltd, increasing its stake from the current 51%, the Hindustan Times reports.

Quoting sources, the paper said the emergency funding, described as a mix of debt and equity, will help keep AirAsia India afloat. 

Malaysia’s AirAsia Group Bhd owns a 49% stake in the joint-venture airline, but has reportedly stopped funding the India operation as it faces its own financial woes from the Covid-19 pandemic’s hit on travel.

Sources told the Hindustan Times that the Tata group intends to remain in AirAsia India and may seek a suitable partner as a co-investor.

“The Tata group… firmly believes that the domestic aviation market will come back strongly in the medium term and that there is clearly enough space in the market for a domestic LCC (low-cost carrier),” sources were quoted saying.

AirAsia Group has said it would review its involvement in AirAsia India where it has been “draining cash and causing the group much financial stress”.

AirAsia India began operations in 2014. In May and June this year, it cut pilots’ salaries by an average of 40%. – November 25, 2020.